December Trade Deficit Jumps to 5-Month High as Imports Rise, Exports Fall

03:12 PM EST, 02/19/2026 (MT Newswires) -- The US trade deficit widened to a five-month high in December as imports increased and exports fell, delayed government data showed Thursday.

The goods and services deficit ballooned by about 33% sequentially to $70.31 billion in December on a seasonally adjusted basis, the Census Bureau and the Bureau of Economic Analysis said. That's the widest monthly gap recorded since July, the data showed. The consensus was for a deficit of $55.5 billion in a Bloomberg-compiled survey.

Imports rose 3.6% to $357.6 billion in December, while exports dropped 1.7% to $287.29 billion. The report was delayed because of last year's federal government shutdown

"Despite the larger trade deficit in December, some improvement in the quarter suggests that net exports contributed positively to real (gross domestic product) growth for a third straight quarter in (the fourth quarter)," BMO Capital Markets Senior Economist Sal Guatieri said in a report.

An initial official estimate of US GDP growth for the December quarter is expected to be released Friday. President Donald Trump's sweeping tariffs took effect in August.

The US ran a $12.36 billion deficit in goods trade with China in December, compared with a $14.4 billion gap the prior month, official data showed Thursday. The deficit with Mexico fell to $14.52 billion from $17.82 billion.

The goods trade deficit with the European Union narrowed to $11.09 billion from November's $14.3 billion, though the shortfall with Canada widened to $4.93 billion from $2.44 billion, according to the report.

In 2025, the US goods and services trade deficit ticked 0.2% lower to $901.47 billion, as exports grew 6.2% and imports advanced 4.8%, government data showed.

The US managed to shrink its trade deficits with China, Canada, Japan and much of Europe last year, though its shortfalls with Mexico, Vietnam, and Taiwan "increased sharply," Guatieri said. The latter two countries, especially, benefited from tariff exemptions on semiconductors, as well as on smartphones, computers and other electronic products, he added.

"Tariffs and a cheaper currency are helping to rein in the still-large US trade deficit, but a material improvement will likely await an expansion of domestic production capacity, particularly for high-tech products," Guatieri said.

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